Senator Chuck Grassley is suggesting the federal government’s “deficit problem” means it’s likely there will be new “enforceable payment limits” on farm subsidies.

During a speech at this weekend’s Iowa Ag Summit in Des Moines, Grassley said he supports a federal “farm safety net” and expects crop insurance subsidies to be part of the next Farm Bill, but Grassley has been a frequent critic of sending those payments to wealthy landowners who aren’t actively engaged in the farm operation.

“If you’re a farmer, you have nothing to worry about,” Grassley said. “…Those who get subsidies, but do not farm should admit it, that it’s ridiculous with our $20 trillion debt.”

“The reality of large farmers using loopholes to get unlimited amount of subsidy is they bid up land prices and cash rents that create a huge economic barrier for the next generation,” Grassley said.

Grassley and Joni Ernst — Iowa’s other U.S. Senator — both serve on the Senate Ag Committee. Ernst and Grassley told the audience at the Iowa Ag Summit their top priority is ensuring crop insurance subsidies are retained in the next Farm Bill. However, Ernst said the Conservation Reserve Program should be evaluated.

“One of the most common concerns that I hear from farmers around the state is that whole farms are being idled through CRP,” Ernst said.

Farmers receive yearly “rental payments” from the federal government for acres enrolled in the Conservation Reserve Program and some of the contracts last for up to 15 years. The program was designed to take “environmentally sensitive” land out of row-crop production, but Ernst said too much prime ground for corn and soybeans is being idled in the CRP.

“In addition to be an inefficient use of taxpayer resources, putting productive farmland out of production for extended periods is harmful to our young and beginning farmers and those surrounding communities,” Ernst said.

U.S. Ag Secretary Sonny Perdue signs the agreement for the SCORE program.

U.S. Ag Secretary Sonny Perdue is touting a new program designed to find mentors for beginning farmers.

“New farmers, veterans, those who are transitioning to agriculture from other careers face distinct challenges. They need land. They need equipment. They need access to capital,” Perdue said, “and they need someone to turn to with their questions.”

Perdue spoke Saturday in Des Moines at the Iowa Ag Summit, touting the U.S.D.A.’s new partnership with a group called SCORE — the Service Corps of Retired Executives.

“It’s a non-profit organization providing education, training, mentoring for small businesses to increase their likelihood of success, so it’s another milestone moment in building that legacy for agriculture,” Perdue said. “We’re starting it right here in the great state of Iowa.”

Perdue said the U.S.D.A. will help recruit people in Iowa who will provide “no cost” advice on starting a farming operation. The program will eventually expand to other states. A mentor who is “at the shoulder” of a beginning farmer can steer them away from the pitfalls of getting too deeply in debt, according to Perdue.

“The combines that we have to field, the land, the rent, the inputs — the fertilizer, seeds and other things, it’s a business,” Perdue said. “And it’s not necessarily a small business.”

Perdue is on a five-state tour of the Midwest. He visited the Mississippi Valley Fair in Davenport on Sunday. On Saturday morning, Perdue toured Sukup Manufacturing in Sheffield before delivering the keynote speech at the Iowa Ag Summit in Des Moines.

On Saturday afternoon, Perdue visited Living History Farms in Urbandale and he tweeted about seeing steam engine tractors, threshing and watching a baseball game played by the original rules. Perdue is making stops in Illinois today.

Speakers at today’s Iowa Ag Summit in Des Moines suggested opportunities and risks are ahead as the Trump Administration renegotiates the North American Free Trade Agreement.

Officials from the U.S., Canada and Mexico will convene in Washington on August 16 to begin the first round of discussions.

U.S. Agriculture Secretary Sonny Perdue did not mention NAFTA directly during his keynote address at the Iowa Ag Summit, but Perdue talked about it with reporters afterwards.

“First of all, the principle is: ‘Do no harm.’ Overall, agriculture’s done very well under NAFTA and we hope to continue that,” Perdue said. “There are a few things that need to be addressed, certainly, with Canada and with Mexico.”

But Perdue said “not all sectors have benefitted equally” under the trade deal.

“Our producers in south Florida, vegetables and fruits, have not done as well. Our pork, our dairy, our grain farmers have done relatively well under NAFTA,” Perdue said. “We want to make sure that we have a good, fair deal that’s enforced and we can live with maybe for another 20 years.”

Three Canadian officials spoke from the summit’s stage and each talked about NAFTA. Fred Gorrell, the assistant deputy minister for agriculture in Canada, said the U.S. and Mexico are the “envy of the world” when it comes to the long-standing trade relationship.

“Not only do we trade with each other, we build things together,” Gorrell said during a panel discussion this morning.

Jean-Claude Poissant, Canada’s parliamentary secretary for agriculture, addressed the summit early this afternoon, arguing trade drives the economies “on both sides of the border.”.

“The government of Canada is committed to working with you to grow the Canada-U.S. relationship,” Poissant said. “…The main point I want to make is that the Canada-U.S. relationship is strong, stable and beneficial to both our great nations.”

The Iowa Ag Summit also covered issues like prospects for the next Farm Bill, but trade policy was at the forefront of the day-long event. Governor Kim Reynolds, the event’s opening speaker, said “trade concerns are troublesome” for Iowa farmers and businesses that export to Canada and Mexico, but she said “modernizing” NAFTA presents an opportunity for the state.

“Our goal is to ensure Iowa’s high quality products continue to move across borders and around the world,” Reynolds said.

Senator Chuck Grassley said American agriculture “has benefitted from NAFTA” — but he warned renegotiating the trade pact will be “more difficult” with Canada than with Mexico.

“There are some areas, like Canadian dairy policy, that are going to be quite a challenge if we try to make changes in that area, but I think it’s legitimate that we try to do that,” Grassley said.

Randy Spronk, a past president of the National Pork Producers Council, noted Canada and Mexico bought more than $2 billion worth of U.S. pork last year.

“As a matter of fact, you add Mexico and Canada together — Mexico is number two and Canada is number four — that’s one third of our exports,” Spronk said.

Senator Joni Ernst said in addition to NAFTA, the Trump Administration must establish new “bilateral” agreements now that the proposed Trans Pacific Partnership has been scrapped.

“If we don’t pursue these trade agreements, I guarantee you that China will,” Ernst said.

And that makes international trade a national security issue, according to Ernst.

Bruce Rastetter, the agribusinessman who hosted and organized today’s event, told reporters during the lunch break that open markets are critical to both farmers AND Iowa manufacturers.

“One of the negative outcomes of NAFTA has been the loss of jobs in rural Iowa,” Rastetter said.

Rastetter also announced the next Iowa Ag Summit will be on March 3, 2018 and he plans to make it an annual event.

“There’ll be an emphasis on trade, manufacturing and I think also in light of the need for improved water quality in agriculture, we’ll have an emphasis on that,” Rastetter said.

Panelists at this weekend’s ag summit discussed water quality, too. One panelist suggested federal crop subsidies should only be provided to farmers who engage in conservation practices. Others discussed how to provide “accountability” and measure progress.

The latest U.S.D.A. report estimates the value of Iowa farmland now averages $8,000 an acre.

Farmland values in Iowa were up nearly two percent in the past two years according to the U.S.D.A. The other “corn belt” states of Ohio, Indiana, Illinois and Missouri all failed to see an increase in land values.

The U.S.D.A. calculation includes the value of homes and farm buildings along with pastures and cropland in its value measurement. The national average price for farmland is about $3,000.

The USDA calculates the average price for an acre of Nebraska farmland has declined by 1.7 percent from 2015 values. Farmland values are up 9.5 percent in Wisconsin and increased by about one percent in Minnesota.

The other neighboring states of Illinois and Missouri saw a decline of about one-and-a-half percent. In South Dakota, the drop was about three percent.

Governor Kim Reynolds is urging the EPA to expand next year’s production mandate for “advanced” ethanol that’s made from plant material rather than just the starch from corn kernels. Reynolds is in Washington, D.C. today to testify at a public hearing on the Renewable Fuels Standard.

“Certainly as the governor of a Midwest state, I’ve been a long, passionate supporter of biofuels and we certainly understand how crucial a robust RFS is to our farmers,” Reynolds said during a conference call with Iowa reporters, “and really to our entire Iowa economy.”

About 43,000 Iowans work in jobs connected to the renewable fuels industry, according to the governor. Reynolds said the industry has consistently responded to higher production goals and the federal mandate for “cellulosic” ethanol needs to “look forward.”

“I’m proud to say Iowa is home to two large-scale commercial cellulosic facilities that utilize corn stover,” Reynolds said. “We’re also home to the largest cellulosic producer that uses corn kernel fiber, so the near-term future for cellulosic is really, I think, much brighter than the proposed obligations.”

The federal mandate for production of conventional ethanol, made from corn starch, would increase next year under the EPA’s proposal. But Reynolds is urging the EPA to adjust its recommendation for mandatory production of soybean-based biodiesel, which has been slightly reduced by the Trump Administration.

“Our innovative farmers and techology have certainly demonstrated that we not only have the capability of feeding, but fueling the world,” Reynolds said.

Earlier this morning, Reynolds and the governor of Nebraska spoke by phone with reporters on a conference call organized by Fuels America, a coalition representing the biofuels industry.

Below are the remarks Reynolds made at the hearing, as prepared for delivery.

“Good morning. Thank you for the opportunity to speak today on behalf of all Iowans regarding the importance of a strong Renewable Fuel Standard or RFS.As governor of a Midwestern state, I’ve long been a passionate supporter of biofuels. I understand how crucial a robust RFS is to farmers and the entire Iowa economy.Iowa’s productive fields and innovative farmers continue to utilize technology to increase yields while decreasing inputs and the impact on our natural resources. Our farmers have demonstrated that you can, in fact, feed and fuel the world.Iowa has long been a national agriculture leader: we are number one in corn and soy production, number one in ethanol and biodiesel production and number one in cellulosic ethanol production.The RFS plays a major role in sustaining our ability to continue as an agricultural leader by giving farmers another market for their commodities.Over 43,000 jobs are supported by the renewable fuels industry in Iowa, generating $2.3 billion of income for Iowans.The impact of the biofuels industry can be felt throughout the state: 3.5 percent ($4.6 billion) of Iowa’s GDP was tied directly to the renewable fuels industry in 2015.As the current ag economy experiences a downturn, sustainable and predictable renewable fuels markets are incredibly impactful to the bottom line of farmers and rural Iowa.Furthermore, Iowans appreciate having options at the pump, and they continue to choose renewable fuels as a lower cost option.According to the Iowa Department of Revenue, Iowans saved over $315 million in 2015 using ethanol blended fuels.Our retailers have responded to the demand by investing in infrastructure to provide options for customers. In 2016, USDA Biofuels Infrastructure Partnership (BIP) Program success—made possible in part by match funds from our local Renewable Fuels Infrastructure Program—led to 217 new blender pumps and 18 underground storage tanks at 70 sites owned by 17 different companies.Iowa farmers and Iowa business continue to invest in this critical industry, thus the need to ensure its viability.The EPA’s indecision in the past has led to market uncertainty that hurt farmers and froze investment in next generation technology. For the first time, the RFS level for conventional biofuels, including corn ethanol, was proposed for the statutorily required 15 billion gallons.We commend the administration for its commitment to keeping the Renewable Fuel Standard at the level set by Congress.I’m also pleased the EPA is bringing predictability and stability to the renewable fuels industry. And, we are also extremely appreciative of the administration’s timeliness of this proposal.In Iowa, we routinely see customers choosing lower cost, higher octane fuels like E15 when given the option.Despite summertime restrictions, Iowa’s E15 sales grew by 193 percent. And the number of Iowa fuel stations offering their customers the option of E15 grew from 40 to 217 over the last year.In Iowa, we regularly see a price advantage for E15 to be 10 cents below E10 and 44-50 cents below E0. Iowa customers experience virtually the same gas mileage with a higher octane, cleaner burning fuel for the price.We must allow states, fuel retailers and consumers to make the decision on E15—not federal government regulators.I ask that the EPA immediately grant E15 the same one pound volatility waiver as E10 to allow for year-round market access to E15.Unfortunately, the EPA’s latest RFS volumes proposal cut the “advanced biofuels” category from 4.28 billion gallons required to 4.24 billion gallons, an important category that biodiesel helps fill.I was disappointed to see biofuels cut overall, and volumes in biodiesel’s main category stay flat under the Renewable Fuel Standard volumes proposal.In 2016, the U.S. diesel market consumed 2.8 billion gallons of biomass-based diesel. I therefore question the proposed 2.1 billion gallon level for 2010—three years later. The justification for a biodiesel number appears to be based on two unfounded concerns. First, concerns were raised about the ability of U.S. biodiesel producers to meet higher levels.The U.S. biodiesel industry is barely running over 50 percent capacity. In Iowa, we’re doing a little better than average. But even in my state last year, we produced about 300 million gallons of biodiesel with roughly 400 million gallons of capacity online and nearing completion. There is simply no question that there are ample American feedstocks and U.S. capacity to justify a much larger biodiesel number under the law.The U.S. can meet production demand, despite the influx of foreign-produced biodiesel we’ve seen in our market from places like Argentina and Southeast Asia. These illegally subsidized imports are pricing U.S. biodiesel producers out of their own market, in many cases, due to trade and other federal policies that need correction.The correct place to address this is in trade policy at the Commerce Department where corrective action is being taken. Today, I urge the EPA to set the 2019 biodiesel level at 2.75 billion gallons.The final area of the proposal that I’d like to comment on is cellulosic ethanol.The original RFS schedule for cellulosic ethanol was ambitious, which is why the EPA was granted broad waiver authority for this category. But the methodology employed by EPA to determine the 2018 proposed level for cellulosic ethanol falls short of the intent of the RFS law. The EPA essentially “looked back” to 2016 in order to set the level for 2018. The “look back” method employed by the EPA falls short and promotes stagnation.Iowa is home to two large scale commercial cellulosic facilities that utilize corn stover. We are also proud to have the current largest producer of cellulosic ethanol, the Quad County Corn Processors, which utilizes corn kernel fiber.Iowa alone also has 12 additional “traditional” ethanol plants on track to produce cellulosic ethanol from corn kernel fiber in 2018. None of them is accounted for in EPA’s lookback analysis. Combined, the corn kernel fiber plants in Iowa will be capable of producing roughly 25 million gallons of cellulosic ethanol in 2018. Yet the proposed level assumes only 17 million gallons of liquid cellulosic biofuel from the entire country.I encourage the EPA to implement the required future projections necessary to properly set the 2018 cellulosic ethanol level in the final rule. In Iowa, we are focused on diversifying our energy portfolio. Renewable fuels are a key piece of the puzzle that allow us to provide home-grown, cleaner-burning, economical fuels.We know the success of the renewable fuels industry is critical to the Iowa economy. And for the first time in a decade, there is a significant ongoing expansion. I ask the EPA, when finalizing this rule, to allow the industry to continue to evolve and flourish.If you do that, renewable fuels production will provide a much needed boost to Iowa commodity prices in addition to providing the lower cost fuel options consumers crave.Thank you again for the opportunity to testify today on this very important issue. The administration’s timely action on the RFS is greatly appreciated, as is your commitment to taking our comments into consideration when finalizing the rule.”Iowa renewable fuels supporters can weigh in on the RFS proposed levels. The EPA comment period is open now through August 31. To sign a petition supporting ethanol or biodiesel, go to iowarfa.org/rfs.

Governor Kim Reynolds predicts there’ll be expanded ag trade to China in the years ahead, but Reynolds said this morning that Iowa exporters need to monitor how North Korea’s nuclear ambitions could impact trade with China.

“They are walking a fine line in China,” Reynolds said during an interview with Radio Iowa and The Cedar Rapids Gazette. “They’re sending troops to the border. They don’t want North Korea to have nuclear capability either, so they’re monitoring that.”

China also worries that if North Korea’s dictatorship topples, there would be a unified Korea under a democratic system of government. Reynolds returned to Iowa this past Friday after a trade mission to China that was solely focused on expanding shipments of Iowa agricultural products to China. Former Governor Terry Branstad hosted an event for the Iowa trade delegation at the U.S. Embassy in Beijing. Reynolds was able to meet privately with Ambassador Branstad, too.

“I have complete confidence in him,” Reynolds said. “It’s a tough assignment. He recognizes that. It started with sending arms to Taiwan and some of the legislation that’s coming out of Washington, D.C., so he is continuing to balance the needs of the United States and working with China.”

This weekend President Trump tweeted that China had done “nothing” but talk about dealing with North Korea’s nuclear threat. Trump made the U.S. trade imbalance with China a major 2016 campaign issue and the president said in his Saturday tweet that “foolish past leaders” of the U.S. have allowed the Chinese “to make hundreds of billions of dollars a year in trade.”

Governor Reynolds said she saw signs of progress on trade during her trip, including the Chinese decision to allow four new varieties of genetically-modified corn and soybeans into China.

“But we said we need to complete the other four. It was really important that we have some consistency, predictability, timeliness in the approval process and we said both on our part as well as their part because that’s what’s going to allow us to feed a growing world population,” Reynolds said. “They’re estimating that by 2020 they’ll have another 300-400 million Chinese that will move into the middle class.”

Iowa Agriculture Secretary Bill Northey was also part of the Iowa delegation that went to China this month. He said there’s “no way” to predict how the North Korean situation will “play out.”
“We’re hopeful that the North Korea tensions can get worked out and trade continues to improve with China,” Northey said during an interview after a meeting with the governor and the rest of the State Executive Council.

A group of Chinese students who’re in Iowa and plan to attend high schools and colleges here posed for pictures with Reynolds and Northey this morning in the governor’s office.

A $250 million pork processing facility is continuing to take shape near Eagle Grove. Construction is on target for an early 2019 opening of the Prestage Farms plant.

Eagle Grove City administrator George McGuire says they’re excited about the plant and the economic boost it will provide to the region.

“Anytime you can add value to agriculture in this part of the country, you’re taking steps in the right direction,” McGuire says. “Construction out at the Prestage plant is progressing. You can visibly see the construction taking place at the site so it’s pretty exciting for this area.” McGuire says North Carolina-based Prestage is building a state-of-the-art facility that will provide a thousand jobs and a positive infusion for the local economy.

“Prestage has been above-board and they’ve been great to work with,” McGuire says. “I feel like we have a partner in them. They want what’s best for our community and for the area and we want what’s best for them too.” McGuire expects the Prestage pork plant will lead to more businesses locating or relocating in their community in the future.

“When you add 1,000 jobs to an area like Eagle Grove that has a population around 3,500 to 3,600 people, you’re going to see some significant economic development,” he says. A big industry like Prestage in a small community is just what rural areas need all over the state of Iowa, according to McGuire, as he says people understand how important agriculture is to their areas.

President Trump has nominated an Iowan who was a top policy advisor on Trump’s 2016 presidential campaign to serve as the USDA Undersecretary for research, education and economics. Sam Clovis, formerly of Hinton, Iowa, has been working in the USDA since Trump took office, serving as a liason to the White House.

“This may be the last rodeo I ever have. I can’t believe I’ve had this experience,” Clovis said a year ago during an appearance in Iowa. “But I will tell you this: I can’t imagine anything more important than what I’m doing right now because it’s about the country.”

His nomination to be the top science advisor in the USDA has sparked controversy, as Clovis has said he’s skeptical of climate science.

“I have looked at the science and I have enough of a science background to know when I’m being boofed and I think a lot of what we see is ‘junk science’, so I’m a skeptic,” Clovis said during a 2014 interview on Iowa Public Radio.

“…Does man have an impact on the environment? Absolutely, but there’s a difference between having an impact on the environment and leading us to something that we have now changes from global warning now to climate change because I’m not sure what climate change means.”

Clovis said he’s wary of efforts to restrict human activity deemed damaging to the environment.

“What we see about a lot of this…is really about income redistribution from rich nations that are industrialized to nations that are not and it comes down to this false premise…that we ought to consume based on population rather than on the strength of our economy,” Clovis said. “If we have 20 percent of the world GDP, it wouldn’t be a surprise to anyone that we consume 20 percent of the energy of the world.”

Clovis finished second in the June 2014 Republican Primary for U.S. Senate and then he ran as the Republican Party’s nominee for state treasurer in the 2014 General Election. Clovis worked on Rick Perry’s presidential campaign, but after Perry dropped out of the race Clovis joined the Trump team in August of 2015. Clovis helped edit Trump’s most recent book as well.

Clovis is a US Air Force veteran who was a Morningside College economics professor and talk show host on KSCJ Radio in Sioux City before he entered politics.

Governor Kim Reynolds is on her way to China today for a trade mission focused exclusively on promoting Iowa agriculture products.

“The trade mission’s focus is to grow our exports and to improve Iowa’s economy,” Reynolds said recently. “Right now one in five jobs are attributable to international trade and actually one in six jobs is attributable to agriculture and ag-related industries.”

The leaders of nine commodity groups have joined Reynolds in China. Craig Floss, CEO of the Iowa Corn Growers Association, is among them.

“For some of our commodities China is a developed market,” Floss said during a news conference announcing the trade mission. “For others, it’s a new market and for others we have a number of barriers that still need to be resolved, but with 20 percent of the world’s population and only 10 percent of the world’s arable land, it is absolutely essential that China have imports for a stable food supply and that makes China a critical market for all of Iowa agriculture.”

More than 1.4 billion people live in China and China’s growing middle class already is larger than the entire U.S. population.

This is the sixth time Reynolds has traveled to China on behalf of Iowa, but her first since former Governor Terry Branstad became U.S. Ambassador to China.

“I can’t underscore how important and how fortunate we are to have the relationships that we do with the leadership in China,” Reynolds said during a news conference in her statehouse office.

Reynolds said the Chinese consider the Iowa “brand” to be “reliable and safe” — whether it’s attached to a company or a commodity. In addition to the Corn Growers, representatives of the Iowa Cattlemen’s Association, Iowa Pork Producers, the Iowa Soybean Association and the Iowa Farm Bureau will be on the trip, along with commodity groups representing Iowa’s poultry industry. The group will visit Beijing, Shanghai and Xian before returning on July 28.

A blistering heat wave has washed over Iowa this week and as temperatures rise, so does the level of concern among livestock producers.

Iowa State University Beef Center Veterinarian Grant Dewell says the biggest keys to keeping cattle comfortable is plenty of shade and large amounts of drinking water.

“Their water intake will increase by two to three times during these hot days,” Dewell said. “So, we always want to make sure people’s water tanks are in good shape, the valves are running freely, and they don’t have something stuck or some hard water deposits on there that limit the ability for those tanks to refill.” Farmers are also advised to use fans and sprinkle cattle with water if the animals are showing signs of heat stress.

According to Dewell, cattle in Iowa fair pretty well when temperatures are below 90-degrees. Actual temperatures this week have reached the mid-to-upper 90s in parts of the state. “If you think about it, most of our cattle we deal with (in Iowa) — Angus, Hereford, Simmentals — are cattle from the north; northern England, Germany, and those types of places where they don’t get this amount of heat,” Dewell said. “They’re really developed for cold weather environments and an Iowa summer is a little bit warm for them.”

There have been no reports of cattle deaths in Iowa due to heat in many years. In the summer of 2011, beef producers in five states reported nearly 20,000 cattle deaths due to an extended period of extreme heat and humidity. According to the Iowa Beef Industry Council, there are more than 3.8 million cows on farms across the state. Iowa is ranked 9th in the country in terms of beef cow production and 12th in dairy cows.